Interest is compounded quarterly for 3 years, which is a total of 12 times.
Therefore the answer is \(\displaystyle{8500}\cdot{\left({1.06}^{{t}}\cdot{2}\right)}={17103.67}\)

Question

asked 2020-11-12

Finance bonds/dividends/loans exercises, need help or formulas

Some of the exercises, calculating the Ri is clear, but then i got stuck:

A security pays a yearly dividend of 7€ during 5 years, and on the 5th year we could sell it at a price of 75€, market rate is 19%, risk free rate 2%, beta 1,8. What would be its price today? 2.1 And if its dividend growths 1,7% each year along these 5 years-what would be its price?

A security pays a constant dividend of 0,90€ during 5 years and thereafter will be sold at 10 €, market rate 18%, risk free rate 2,5%, beta 1,55, what would be its price today?

At what price have i purchased a security if i already made a 5€ profit, and this security pays dividends as follows: first year 1,50 €, second year 2,25€, third year 3,10€ and on the 3d year i will sell it for 18€. Market rate is 8%, risk free rate 0,90%, beta=2,3.

What is the original maturity (in months) for a ZCB, face value 2500€, required rate of return 16% EAR if we paid 700€ and we bought it 6 month after the issuance, and actually we made an instant profit of 58,97€

You'll need 10 Vespas for your Parcel Delivery Business. Each Vespa has a price of 2850€ fully equipped. Your bank is going to fund this operation with a 5 year loan, 12% nominal rate at the beginning, and after increasing 1% every year. You'll have 5 years to fully amortize this loan. You want tot make monthly installments. At what price should you sell it after 3 1/2 years to lose only 10% of the remaining debt.

Some of the exercises, calculating the Ri is clear, but then i got stuck:

A security pays a yearly dividend of 7€ during 5 years, and on the 5th year we could sell it at a price of 75€, market rate is 19%, risk free rate 2%, beta 1,8. What would be its price today? 2.1 And if its dividend growths 1,7% each year along these 5 years-what would be its price?

A security pays a constant dividend of 0,90€ during 5 years and thereafter will be sold at 10 €, market rate 18%, risk free rate 2,5%, beta 1,55, what would be its price today?

At what price have i purchased a security if i already made a 5€ profit, and this security pays dividends as follows: first year 1,50 €, second year 2,25€, third year 3,10€ and on the 3d year i will sell it for 18€. Market rate is 8%, risk free rate 0,90%, beta=2,3.

What is the original maturity (in months) for a ZCB, face value 2500€, required rate of return 16% EAR if we paid 700€ and we bought it 6 month after the issuance, and actually we made an instant profit of 58,97€

You'll need 10 Vespas for your Parcel Delivery Business. Each Vespa has a price of 2850€ fully equipped. Your bank is going to fund this operation with a 5 year loan, 12% nominal rate at the beginning, and after increasing 1% every year. You'll have 5 years to fully amortize this loan. You want tot make monthly installments. At what price should you sell it after 3 1/2 years to lose only 10% of the remaining debt.

asked 2020-12-24

Consider the following annuity: $1,000 due at the end of each year for three years, and $2,000 due thereafer at the end of each year for three years. Assume an interest rate of 2% compounded annually to find the present value of the annuity.

asked 2021-03-05

Larry came up a little short one month at bill paying time and had to take out a title loan on his car at Check Casher's, Inc. He borrowed $260, and 3 weeks later he paid off the note for $297.50. What was the annual simple interest rate on this title loan?

asked 2021-02-27

Lance Jackson deposited $6,000 at Basil Bank at 8% interest compounded daily. What is Lance’s investment at the end of 4 years? (Use Table12.2.) (Do not round intermediate calculations. Round your answer to the nearest cent.)

asked 2021-02-27

At the end of the summer, a family bought a chair cost $65 and a table cost $189. They need to pay 6.5 % sales tax. How much they must pay for sales tax?

asked 2021-01-22

Pets Plus and Pet Planet are having a sale on the same aquarium. At Pets Plus the aquarium is on sale for 30% off the original price and at Pet Planet it is discounted by 25%. If the sales tax rate is 8%, which store has the lower sale price? How much will you save by buying the aquarium there? Round to the nearest cent.

\(\displaystyle{b}{e}{g}\in{\left\lbrace{a}{r}{r}{a}{y}\right\rbrace}{\left\lbrace{\left|{c}\right|}{c}{\mid}\right\rbrace}{h}{l}\in{e}\text{Store}&\ \text{ Original Price of Aquarium (\$)}\backslash{h}{l}\in{e}\text{Pets Plus}&{118}\backslash{h}{l}\in{e}\text{Pet Planet}&{110}\backslash{h}{l}\in{e}{e}{n}{d}{\left\lbrace{a}{r}{r}{a}{y}\right\rbrace}\)

\(\displaystyle{b}{e}{g}\in{\left\lbrace{a}{r}{r}{a}{y}\right\rbrace}{\left\lbrace{\left|{c}\right|}{c}{\mid}\right\rbrace}{h}{l}\in{e}\text{Store}&\ \text{ Original Price of Aquarium (\$)}\backslash{h}{l}\in{e}\text{Pets Plus}&{118}\backslash{h}{l}\in{e}\text{Pet Planet}&{110}\backslash{h}{l}\in{e}{e}{n}{d}{\left\lbrace{a}{r}{r}{a}{y}\right\rbrace}\)

asked 2021-01-27

A small drugstore orders copies of a certain magazine for it magazine rack each week. Let X=demand for the magazine, with pmf

\(\displaystyle{b}{e}{g}\in{\left\lbrace{a}{r}{r}{a}{y}\right\rbrace}{\left\lbrace{\left|{l}\right|}{l}{\mid}\right\rbrace}{h}{l}\in{e}{x}&{1}&{2}&{3}&{4}&{5}&{6}\backslash{h}{l}\in{e}{p}{\left({x}\right)}&{\frac{{{1}}}{{{15}}}}&{\frac{{{2}}}{{{15}}}}&{\frac{{{3}}}{{{15}}}}&{\frac{{{4}}}{{{15}}}}&{\frac{{{5}}}{{{15}}}}&{\frac{{{6}}}{{{15}}}}\backslash{h}{l}\in{e}{e}{n}{d}{\left\lbrace{a}{r}{r}{a}{y}\right\rbrace}\)

Suppose the store owner actually pays $1.00 for each copy of the magazine and the price to customers is $2.00. If magazines left at the end of the week have no salvage value, is it better to order three or four copies of the magazine?

\(\displaystyle{b}{e}{g}\in{\left\lbrace{a}{r}{r}{a}{y}\right\rbrace}{\left\lbrace{\left|{l}\right|}{l}{\mid}\right\rbrace}{h}{l}\in{e}{x}&{1}&{2}&{3}&{4}&{5}&{6}\backslash{h}{l}\in{e}{p}{\left({x}\right)}&{\frac{{{1}}}{{{15}}}}&{\frac{{{2}}}{{{15}}}}&{\frac{{{3}}}{{{15}}}}&{\frac{{{4}}}{{{15}}}}&{\frac{{{5}}}{{{15}}}}&{\frac{{{6}}}{{{15}}}}\backslash{h}{l}\in{e}{e}{n}{d}{\left\lbrace{a}{r}{r}{a}{y}\right\rbrace}\)

Suppose the store owner actually pays $1.00 for each copy of the magazine and the price to customers is $2.00. If magazines left at the end of the week have no salvage value, is it better to order three or four copies of the magazine?

asked 2021-01-02

If you have a loan for $5000 with .03% interest to be paid off in 24 months and you have 15 months left, then how much do you owe?

asked 2021-01-23

ED Wong has total of Tk.70,000 invested in a common stock, corporate bonds, and
municipal bonds. In order to limit risk, he has twice as much invested in corporate bonds
as in stock. Last years, the common stock paid a 2% dividend, the corporate bonds paid
10% interest, and the municipal bonds paid 6% interest. ED’s total income last year from
his investments was in Tk.4,800. How much has he invested in bonds?

asked 2020-11-16

herman always carries an inventory of between 60,000 and 80,000 at his store. herman's military antiques. his annual costs for carrying this inventory are 4% for storage, 6% for insurance, 3% for taxes, and 12% interest. what is the greatest possible carrying cost for hermans inventory